Tagged: Housing Society

MUMBAI: In a recent order, the income tax appellate tribunal’s Mumbai bench has held that to claim an interest deduction against a home loan, a taxpayer is not required to submit a completion certificate from any government authority as proof of having obtained possession within the stipulated time period; in this case, three years from the end of the financial year during which the loan was taken. A certificate from the housing society is sufficient evidence, ruled the ITAT, a body that resolves income tax disputes.

The order will come as a major relief to home buyers facing litigation over deductibility of interest on home loans.

Under the Income-Tax (I-T) Act’s Section 24, interest paid on home loans is allowed as a deduction, subject to a yearly cap. Over the years, this cap been enhanced to Rs 2 lakh from Rs 1.5 lakh.

However, to claim deduction, possession of the residential property must be obtained or its construction completed in five years from end of the financial year during which the loan was taken.

The Finance Act, 2016, has increased this period to five years from the earlier three. When interest on a home loan is allowed as a deduction, it reduces the total taxable income, resulting in a lower I-T outgo.

In this case before the ITAT, relating to the financial year 2006-07, Sudhakar Mody bought a flat from Marathon Realty by availing of an IDBI Bank home loan. He claimed a deduction of interest of Rs 1.5 lakh, which was then the maximum amount allowed as a deduction each year. However, the I-T officer asked Mody to furnish a completion certificate from a government authority. As this was not furnished, the interest deduction claim was denied. This act of the I-T officer was upheld by the commissioner of I-T (appeals).

The tax tribunal observed that the flat was ready by October, 2006, and that a soft possession had been given to the flat owner. Further, Mody had obtained the flat’s final possession on March 24, 2007-before the end of the financial year on March 31. As evidence of the possession, Mody had furnished to the commissioner of I-T (appeals) a certificate from the housing society.

It is illegal to occupy a flat without an Occupancy Certificate by the local authority and moreover also be prosecuted

The ITAT held the taxpayer had obtained possession of the flat within the stipulated time period. The ITAT further stated: “The proviso to Section 24 of the I-T Act nowhere states that the taxpayer should furnish a completion certificate from the appropriate government authorities.”

The certificate from the housing society was held by ITAT as sufficient proof of the flat’s possession. In its order dated October 19, the ITAT concluded that the taxpayer was entitled to his claim for deduction of interest against a home loan of Rs 1.5 lakh.

MUMBAI: The good old society notice board on the ground floor, informing the residents about the ‘Sunday meeting’ or the ’12-hour water cut in wings A and B’, may soon be a thing of the past with housing societies going online to manage their day-to-day affairs.

Housing societies in Mumbai, Thane and Navi Mumbai are opting for services of online portals for facilities like instant communication, tracking pending payments of flat owners and tenants, and above all the transparency factor, keeping all the residents in the loop.

The Imperial Towers, which rises 60 floors in Tardeo, is among the growing tribe of smart societies which do paperless in-house transactions and communications. So does the modest Trishul Goldcoast housing society in Sector 9, Ghansoli, indicating how the trend is catching up.

“Just as our cities are getting smarter, with better modes of transport like the Metro, one can’t expect housing societies to continue in the old fashioned way, like official news pasted on the notice board and other trivia spread through chitchat and gossip. We have an online system called the ‘Imperial Adda’ where even our holiday snaps can be downloaded by others,” said a resident of the luxurious Imperial Tower.

Ankur Razdan of Trishul Goldcoast added: “It is not just the posh societies that are opting for hi-tech features. Our society of 70 flats and 15 shops has also subscribed to the services of ApartmentAdda.com to manage our day-to-day work at a nominal cost.”

Razdan added that besides the online pings to the residents (which can also be viewed on individuals’ cell phones) the clarity and transparency of sharing the building’s audit reports and other documents like conveyance deeds keeps everyone informed and updated.

Parel-based Ashok Towers, which is among the tallest skyscrapers in the city, going up to 50 levels, also has a tailor-made online portal for the benefit of its residents. “The society laws, bylaws can now easily be viewed by one and all within our complex. If someone needs a maid for an hour at their flat, they just have to type it online, and quickly get help through our specialised network. This is much better and faster than the earlier tech mode at Google groups,” said a society member, S Vora.

At Ashok Towers, the society portal also has separate categories for flat owners, tenants and clubhouse activities in order to properly manage the accounts and billings.

There are several IT and ERP companies like CommonFloor, ApartmentAdda, ApnaComplex, Society123 among others which provide online services to various housing complexes.

“More and more societies are coming to us to have their own online portal as it is very convenient. Besides registered societies, home buyers are also much younger today and want to know the rules and laws on how to form a society. The online service also helps them keep track of all the legal papers and property documents,” said the 36-year-old managing director of ApartmentAdda, Sangeeta Banerjee.

Having started her engineering career at TCS, Banerjee saw a business opportunity in providing online solutions to housing societies.

Sandeep Bangia, former chairperson of the Seawoods Estate (Phase-2) complex in Navi Mumbai, which has over 700 flats, added that while making the tedious housing society work simpler and smoother, most of the residents can also keep track of the CCTV shots and the visitors coming to their premises. “This in fact helps towards the security aspect too. Hardware devices like entry gate locks and internal pathway lights can also be integrated with the online portal, which is great,” added Bangia.

Also, if a society has more members then the cost of installing such online portals becomes as nominal as just Rs 20 to Rs 30 per flat per month.

Besides the online messaging and transparency, the system has also made it easier for residents to vote online on proposals mooted in a housing complex. “Our society committee in Thane had decided to organise a flashy Rain Dance for the entertainment of its members. However, several residents immediately punctured this idea, as that would lead to a lot of water wastage and also add to noise pollution. So, the rain dance proposal was immediately dropped,” recalled a flat owner who did not want to be named.

Many smart societies have also started using RFID (radio frequency identification) technology at the entry/exit gates; so that all the residents’ vehicles will be automatically tagged at the gate, which will recognise the car owner and open up. So, no more constant honking, waiting for the watchman to open the gate. This is currently in use at Seawoods Estate at Nerul.

Benefits of housing portals:

* The software acts as a network of housing society where residents can communicate with each other on availability of vendors, maids, drivers etc

* Not only can maintenance bills be viewed and paid on the portal but also provides transparency on how the treasury funds are being utilized in a society

* Beneficial for homeowners as they can keep a track of all the developments in their society, write complaints, post notices to society management

“It is the need of the hour, which is why our society of 70 flats and 15 shops has also subscribed to the online services to manage our day-to-day work at a nominal cost. Also, it brings in great transparency of the society accounts” – Ankur Razdan of Trishul Goldcoast complex in Ghansoli

“Just as cities are getting smarter, one can’t expect housing societies to continue in the old fashioned way, like official news pasted on the notice board and other interesting trivia spread through chitchat and gossip. We have an online system called the ‘Imperial Adda’ where even our holiday snaps can be downloaded for the online viewing by others” – resident of Mumbai’s tallest building Imperial Towers at Tardeo

“More and more housing societies in cities and towns are opting for online solutions to manage their works. We were among the first to see business opportunity in the housing society sector; now there are many more players offering ERP. Some of the biggest towers in Mumbai have also taken our software,” Sangeeta Banerjee of ApartmentAdda company